Climate Debate Focuses on Deforestation

The park, home to jaguars, toucans, and rare river otters, faced
the threat of loggers until recently. In a first-of-its-kind approach to conservation,
the Bolivian government joined forces with environmental groups and U.S.
investors to secure the forest's most valuable asset: its carbon.

After the coalition purchased the park's logging rights in
1997, environmentalists worked alongside indigenous groups to establish
alternative income sources - sustainable timber, ecotourism, heart-of-palm
production - to essentially double the protected area. The project now includes
more than 642,000 hectares (1.5 million acres) and should prevent the release
of 5.8 million tons of carbon dioxide over the next 30 years.

"Overall, the project has been a great success - a great
example of how poor and rich countries can work together to fight climate
change through biodiversity and still protect land rights for indigenous
people," said William Powers, a senior fellow at the New York-based World Policy Institute, who managed the
Noel Kempff project's community components while working with the Bolivian group Fundación Amigos de la Naturaleza (FAN).

Powers finds Bolivia's
response upsetting. "I don't see any reasoning for it. REDD is win-win," he
said. "It's a lack of information about what this really is, an understandable
fear and suspicion because of such a history of intervention in Bolivia. There
has been a raping of natural resources here since the 18th century."

Climate negotiators are now debating how to replicate Bolivia's
success without causing an eruption of controversy. Shaping REDD will likely be
among the most difficult tasks at December's United Nations climate summit in Copenhagen, Denmark,
where a successor agreement to the Kyoto Protocol will be decided.

Negotiators widely agree that, unlike in the Kyoto Protocol,
incentives for forest preservation must be included in the new agreement. The
reason is simple: healthy forests absorb carbon dioxide. Cutting and burning
forests, however, contributes about 18 percent of annual human-caused
greenhouse gas emissions - a larger share than all the world's vehicles combined.

Yet it remains unclear how REDD will be integrated into the
final emissions-mitigating mechanism - or whether it will be included at all.

Among tropical countries, leaders are falling into two
camps. A coalition of nations
led by Papua New Guinea and Costa Rica is
calling for the inclusion of REDD in a global cap-and-trade system. Under such
an approach, industrialized countries would finance REDD projects, mainly in
developing countries, to compensate for their own emissions.

Industrialized countries, including the United States
and the member states of the European Union, appear more supportive of the
market-based route. Most estimates predict that if forestry projects such as
REDD are included in a global cap-and-trade system, the credits generated from
such projects would rank among the cheaper options to offset emissions. The
market strategy may also generate more funds over a longer period of time.

"It's good for climate. It's good for businesses because
they can get [carbon] offsets at lower costs. And it's good for local people,"
said Sarene Marshall, director of The Nature
Conservancy's climate change program, which organized the Noel Kempff
project.

Greenpeace International, on the other hand, warned at
a climate summit in Bonn, Germany, earlier this month that a
widespread allotment of forest offset credits would depress the price of carbon
as much as 75 percent, and therefore remove the incentive for polluters to
reduce emissions. The
report also said that a market-based REDD strategy could redirect critical
funding away from clean energy efforts in developing countries. China alone would lose $10-100
billion per year, the group said.

Other critics, such as the research group Ecosystem
Marketplace, disagree with the Greenpeace report, arguing that the cost of
REDD projects may increase over time and that several industrial carbon offsets
would likely be less expensive.

Beyond the issue of financing, several tricky issues face
negotiators. It remains unclear, for example, how to establish deforestation
baselines: should countries improve upon current levels of forest cover or
historical levels? Developing countries with low deforestation rates, such as Guyana, are positioning themselves to receive
REDD funding - should they be treated equally to countries with high
deforestation rates, such as China?

Negotiators must also agree on a standard to measure and
validate emissions reductions. "A lot of what we need is technically feasible,"
said Val Kapos, a senior advisor in forest ecology and conservation with the U.N. Environment Programme's World
Conservation Monitoring Centre. "The bigger problem is making it possible
for people to use it. The world is full of remote sensing [satellite imagery]
wizards who can do all this, but they're mostly at universities and research
institutes in developed countries."

Another concern, which negotiators are only beginning to
address, relates to indigenous
peoples' rights and the fact that land ownership is ambiguous in many areas
likely to receive REDD funding. Indigenous leaders are lobbying for the climate
treaty to mention that all REDD programs seek the "free, prior, and informed
consent" of local people.

"If we have to compromise a bit, let's at least see that the
rights of indigenous people are respected," said Victoria Tauli-Corpuz, chair of the U.N. Permanent Forum on Indigenous
Issues. "If the rhetoric is there, we can push for greater
recognition of rights."

While these issues are far from being resolved, the notion
of a three-staged approach is gaining traction among the designers of REDD.
First, countries would develop a national strategy and undertake demonstration
projects. Next, countries would receive loans to reform policies such as land
tenure and forestry laws. Finally, large-scale funding would be provided for
improved forest management. A World
Bank avoided-deforestation program that launched last year follows this
approach, and a Norway-supported Meridian
Institute report, released at this month's Bonn conference, recommended it as well.

For environmentalists who have spent years struggling to
halt deforestation, REDD offers tremendous hope. If forestry credits are
included in an international carbon market, an estimated $1-10 billion could be
raised for REDD projects each year - a much larger sum than has been typically
made available for forest protection. In contrast, protected areas across the
developing world were provided with only an estimated $695 million annually
during the 1990s, not exclusively invested in forests, according to Kapos.

Despite the additional funding, Kate Horner, an
international climate campaigner with Friends of
the Earth, said REDD will likely fail unless countries properly address the
crucial second phase, of reforming land tenure and other policies.

"Efforts to address deforestation have never been want of
money. We've been throwing money at deforestation for years," Horner said.
"Addressing issues of rights and governance is at the heart of the problem."